Dow Breaks Losing Streak As Bad-News Is Good-News Once Again

"Most shorted" stocks rallied their most in 10 weeks. Despite AAPL's tumble (and Seagate), the NASDAQ ended the day greenalong with the rest of the major US indices as the Dow broke its 5-day losing streak. Stocks in general recovered from the pre-Taper levels but remain notably down on the year. Most of the day's gains occurred in the first hour of the day as "most shorted" names were ripped higher (+1.8% vs the market's +0.75% at 11ET) which helped the Trannies outperform. The USD oscillated once again but ended practically unchanged (on the day and week) as AUD strengthens and JPY weakens providing just enough support to hold stocks higher. The USD stability was entirely missing from commodities which cracked around teh durable goods data with oil surging and bullion bulls purging. Treasuries were mixed but practically unchanged (despite some notable volatility around the Dur Goods data) with very modest steepening. VIX dropped 1.6vols to 15.8% - its biggest drop in 6 weeks.

This was a squeeze day... "most shorted" stocks rallied by thei rmst in 10 weeks...

This is only the 4th day in thelast 4 weeks when all the major indices are green together... as the Fed hope for tomorrow remains... The short squeeze this morning lifted everything (led by Trannies) then once Europe closed we trod water..

EA & Yahoo validated yesterday's market call and the Apple proof we are beyond the growth phase of infotainment companies. Carl will likely get more agressive in his activism, we saw this all before with Blockbuster.

Many expect Yellen will stay the course on the taper. This is interesting, because none of the fed data unless it was the U-90 supports taper to continue on target for 2015 exit. There is also the Chinese and their suicide bomb jacket to contend with, and Turkey/Indonesia tonight. And Ukraine.

So is the narrative that the Fed will taper the taper due to the risk of an EM collapse? If so, then they admit that they can never taper and they look like even bigger fools. Allowing some real pain is the only way they can stop the taper now, and we are nowhere near there yet. Taper = at least one sacrificial lamb on the way to un-taper. . .which is why I didn't believe they would do it in the first place.